Khalid al-Buainain, senior vice-president for refining at Aramco, has said that financing the projects through borrowing in a tight credit market will be a challenge, but the long-term economic viability of the two refineries remains positive.

“Because of the uncertain nature of the global financial crisis, it is really too early to tell what sort of fallout there will be for the funding of these projects,” said Al-Buainain, in a speech to the Saudi branch of the Society of Petroleum Engineers on 26 October.

Costs on the Jubail complex have soared to more than $10bn, while the cost of Yanbu is understood to have doubled to $12-13bn (MEED 18:4:08).

Earlier in 2008, Aramco confirmed that Total and ConocoPhillips had been selected as Aramco's joint venture partners on the two 400,000-barrel-a-day (b/d) facilities on the Gulf and Red Sea coasts.

Al-Buainain said that declining commodity prices and an easing of labour shortages will reduce the estimated costs of the two projects.

“Short-term project economics may actually benefit from the current financial turmoil and companies with a lot of cash will come ahead,” he said.

He added that Aramco’s long-term business model means the impact of short-term market changes will have little effect on the company’s project portfolio.

“In fact, given the long lead-times involved in petroleum industry projects, we may actually be poised to catch the bounce as the global economy recovers, energy demand picks up and our new facilities come on stream," he said.